Turkey Eyes Iran Share in Iraqi Markets after US Sanctions Hit
With US re-imposed sanctions against Iran scaling back Iranian economic activity in the region, Turkey is looking to fill the void in commodity exports left behind by Iranian companies leaving Iraq.
Turkish exports are expected to increase, compensating for goods imported from Iran.
Iraq’s head of Turkey-Iraq Cooperation Council Amin Taha said that Iraqi markets generally prefer to import basic commodities from Iran because of their low rates.
Iranian goods popularly imported by Iraq are slaughterhouse products, eggs, legumes, plastic manufactures, as well as building materials. Taha added that “Iraq will no longer import these products from Iran, and will likely turn to Turkey to accommodate its market demands.”
Iran is currently facing two waves of harsh US sanctions, the first of which was imposed on August 6, and the second on November 5. Its industrial, commodity export, oil, financial, banking and shipping sectors all have been affected as a result.
Despite the current shortcoming in size of trade relations between Iraq and Turkey, Taha confirmed that an increase will be witnessed after Iraqi traders ink deals with Turkish companies to secure supplies.
According to official figures, the volume of trade exchange between Iraq and Turkey in 2017 amounted to 10.6 billion dollars, a rise of 15 percent from 2016.Turkey's exports to Iraq represent about 5.8 percent of Turkey's total exports.
Turkish exports to Iraq were valued at $9 billion in 2017, while Iraqi exports to Turkey reached only $1.6 billion worth of goods.
It is noteworthy that Turkish construction companies have an important share in Iraq’s contracting market, an economic channel bolstered since 1981.
Turkish companies contributed to the completion of 645 Infrastructure projects, between 2003 and 2012, worth $12.9 billion.
“There are only two customs gates between Iraq and Turkey, and this has a negative impact on shared trade relations,” Taha said while recommending the opening of new customs gates.
Turkey is seeking to strengthen its trade relations with both with Baghdad and Erbil, the capital of Iraqi Kurdistan, to a higher level in coming days, reaffirmed Taha.
Mevlut Cavuşoglu, the Turkish foreign minister, paid a visit to Baghdad and Erbil last month highlighting Turkish-Iraqi continued ties in various fields.
According to experts, Turkey can export many food products, agricultural, building materials, textiles, cars, machinery, and electrical appliances to Iraq.